Next week, most of the healthcare IT industry will descend on Orlando to attend HIMSS’19. This is my 12th year attending HIMSS, an event for me that is more about networking and confirming assumptions than actually learning anything new.

For years now, HIMSS and the multitude of vendors exhibiting there have feasted at the trough of federal largesse ($35B plus), via the HITECH Act passed in 2008 to foster adoption of EHRs. The HITECH Act was successful, driving EHR adoption from the low teens to over 90% today. Though some may question the value of that investment, I personally believe that over time (another 7-10 years) we will reap benefits that far exceed that initial investment.

However, now that we’ve reached that level of adoption, the market has plateaued. Sure, there were hopes of a robust EHR replacement market, but that never materialized. Then there was the hope for huge gains (profits) to be made on the shift from volume to value through the sale of PHM solution suites. That didn’t pan out too well either as the fate of the ACA was left in the lurch with a change in administrations. Also, quite frankly, PHM is a complex sell, requiring significant change management that few healthcare organizations were ready to commit to and few vendors had the services to support.

The provider health IT market is going through a significant transition and it’s not going to be pretty. Clearly, the party is over and one has to wonder: Why does HIMSS continue to exist? Why are all these vendors here? Are we on the Titanic, seemingly blind to the economic icebergs that surround us?

But I digress.

What is important is that the EHR has become the central nervous system to provider organizations. Secondly, this market will continue to consolidate rapidly with few independent EHRs surviving the shakeout. Those left standing will attempt a number of different strategies to drive continued growth in a plateauing market.

All major EHR vendors are pursuing an extension strategy moving from EHR to supporting PHM, RCM, analytics, etc, though their capabilities in these adjacent areas vary wildly.

Expansion into new markets. Epic is looking to dentistry and insurance. Allscripts, life sciences and payers with Veradigm. Cerner, government and payers. All large acute/ambulatory EHR vendors are actively pursuing overseas markets, with Meditech particularly strong in Canada.

It remains to be seen how successful these strategies will be but rest assured, even if successful, no EHR vendor is completely safe from a future acquisition.

This sets the stage for what to expect at HIMSS’19:

All vendors will continue to tout the momentum they have in the market as if this market will remain forever on a hockey stick trajectory, but very few can back it up.

AI/ML will be just as pervasive this year as last, permeating all aspects of health IT, but likely very little demonstrable proof of scale.

A multitude of disease-specific, chronic management solutions but no vendor with a true portfolio of best-in-class solutions on a single platform. Resmed appears close to enabling such a platform for respiratory ailments.

More FHIR use cases.

Plenty of patient-centric this, consumer-centric that but all a head fake as it is really about capturing patient revenue via online bill pay and filling vacant appointment slots.

And what I hope to find at HIMSS’19:

An AI/ML company that has truly scaled its solution across an enterprise in at least two customer deployments.

Clear metrics from EHR vendors on the level of adoption and use of FHIR across their client base.

An engagement solution that is looking beyond the near-term volume/revenue needs of a healthcare organization to how to truly engage patients/consumers in their health e.g. Aetna/Apple’s Attain app.

How vendors are assisting their customers in achieving demonstrable, defendable ROI from their solutions. Health Catalyst stands out here.

May your trip to HIMSS’19 be a success, however you define it. And if you see us in the halls, do not hesitate to stop and say hello – maybe we’ll have a few quick on-the-fly notes to share.

As is our custom here, we like to look back on our predictions for the closing year and see just how well we did. Some years we do amazingly well, others we over-reach and miss on quite a few. For 2018, we got seven of our 13 predictions spot-on, two were mixed results and four predictions failed to materialize. If we were a batter in the MLB we would have gotten the MVP award with a .538 batting average. But we are not and have to accept that some years our prediction average may hover just above the midpoint as it did this year.

Stay tuned, 2019 predictions will be released in about one week and it is our hope that they will inspire both rumination and conversation.

Merger & acquisition activity continues; Humana or Cigna acquired.

Major mergers and acquisitions that mark the end of 2017 (CVS-Aetna, Dignity Health-CHI and rumored Ascension-Providence) will spill over into 2018. Both Humana and Cigna will be in play, and one of them will be acquired or merged in 2018.

MISS – neither happened. However, Cigna did pick-up PBM service Express Scripts and rumors continue to swirl about a possible Humana-Walmart deal or more recently, even a Walgreens-Humana deal.

Hot on the health heels of CVS’ acquisition of Aetna, growth in retail health reignites, albeit off a low overall footprint. By end of 2018, retail health clinic locations will exceed 3,000 and account for ~5% of all primary care encounters; up from 1,800 and ~2%, respectively, in 2015.

MISS – Modest growth in 2018 for retail health clinics with an estimate of around ~2,100 by year’s end. Telehealth, which is seeing rapid growth and on-site clinics may be partially to blame.

Apple buys a telehealth vendor.

In a bid to one-up Samsung’s partnership with American Well, and in a bid to establish itself as the first tech giant to disrupt healthcare delivery, Apple will acquire a DTC telehealth vendor in 2018.

MISS – Apple continues to work on the periphery of care with a focus on driving adoption of its Health Records service in the near-term with a long-term goal of patient-directed and curated longitudinal health records.

Sixty percent of ACOs struggle to break even.

Despite investments in population health management (PHM) solutions, payers still struggle with legacy back-end systems that hinder timely delivery of actionable claims data to provider organizations. The best intentions for value-based care will flounder and 60% of ACOs will struggle to break even. ACO formation will continue to grow, albeit more slowly, to mid-single digits in 2018 to just under 1,100 nationwide (up from 923 as of March 2017).

HIT – MSSP performance data showed only 34% earned shared savings in 2017 (up from 31% in 2016) and by year’s end it is estimated there will be ~1,025 ACOs in operation.

Every major EHR vendor delivers some level of FHIR support, but write access has to wait until 2019.

While some of the major EHR vendors have announced support for write access sometime this year and will definitely deliver this support to their most sophisticated customers, broad-based use of write APIs will happen after 2018. HCOs will be wary about willy-nilly changes to the patient record until they see how the pioneers fare.

HIT – FHIR-based read APIs are available from all of the major EHR vendors. Write APIs are still hard to find. To be fair, HCOs as a group are not loudly demanding write APIs.

True cloud-based deployments from name brand vendors such as AWS and Azure are in the minority today. But their price-performance advantages are undeniable to HIT vendors. Cerner will begin to incent its HealtheIntent customers to cloud host on AWS. Even Epic will dip its toes in the public cloud sometime in 2018, probably with some combination of Healthy Planet, Caboodle, and/or Kit.

True condition management remains outside providers’ orbit.

Providers will continue to lag behind payers and self-insured employers in adopting condition management solutions. There are two key reasons why: In particular, CMS’s reluctance to reimburse virtual Diabetes Prevention Programs, and in general, the less than 5% uptake for the CMS chronic care management billing code. In doing so, providers risk further isolation from value-based efforts to improve outcomes while controlling costs.

HIT – Awareness of the CCM billing code (CPT code 99490) remains moderate among providers and adoption is still estimated at a paltry less than 15%.

Mobile-first becomes the dominant platform for over 75% of care management solutions.

Mobile accessibility is critical for dynamic care management, especially across the ambulatory sector. More than 75% of provider-focused care management vendors will have an integrated, proprietary mobile application for patients and caregivers by end of 2018. These mobile-enabled solutions will also facilitate collection of patient-reported outcome measures, with 50% of solutions offering this capability in 2018.

MIXED – While the majority of provider-focused care management vendors do have an integrated mobile application (proprietary or partnership), collecting PROMs is still a functionality that remains limited through an integrated mobile solution.

Solutions continue to document SDoH but don’t yet account for them.

A wide range of engagement, PHM, EHR, and care management solutions will make progress on documenting social determinants of health, but no more than 15% of solutions in 2018 will be able to automatically alter care plan interventions based on SDoH in 2018.

HIT – despite all the hoopla in the market about the need to address SDoH in care delivery, little has been done to date to directly affect dynamic care plans.

ONC defines enforcement rules for “data blocking,” but potential fines do little to change business dynamics that inhibit data liquidity.

The hard, iron core of this issue is uncertainty about its real impact. No one knows what percentage of patients or encounters are impacted when available data is rendered unavailable – intentionally or unintentionally. Data blocking definitely happens but most HCOs will rightly wonder about the federal government’s willingness to go after the blockers. The Office of the National Coordinator might actually make some rules, but there will be zero enforcement in 2018.

MIXED – Last December we said, “The hard iron core of this issue is uncertainty about its real impact.” Still true. Supposedly, rulemaking on information blocking is complete but held up in the OMB. The current administration does not believe in regulation. So “data blocking” may be defined but there was and will be no enforcement or fines this year.

PHM solution market sees modest growth of 5-7%.

Providers will pull back on aggressive plans to broadly adopt and deploy PHM solution suites, leading to lackluster growth in the PHM market of 5% to 7% in 2018. Instead, the focus will be on more narrow, specific, business-driven use cases, such as standing up an ACO. In response, provider-centric vendors will pivot to the payer market, which has a ready appetite for PHM solutions, especially those with robust clinical data management capabilities.

HIT – PHM remains a challenging market from both payment (at-risk value-based care still represents less than 5% of payments nationwide) and value (lack of clear metrics for return on investment) perspectives. All PHM vendors are now pursuing opportunities in the payer market, including EHR vendors.

In-workflow care gap reminders replace reports and dashboards as the primary way to help clinicians meet quality and utilization goals.

This is a case where the threat of alert fatigue is preferable to the reality of report fatigue. Gaps are important, and most clinicians want to address them, but not at the cost of voluminous dashboards or reports. A single care gap that is obvious to the clinician opening a chart is worth a thousand reports or dashboards. By the end of 2018, reports and dashboards will no longer be delivered to front-line clinicians except upon request.

MISS – Reports and dashboards are alive and well across the industry and remain the primary way to inform front-line clinicians about care gaps.

At least two dozen companies gain FDA-approval of products using machine learning in clinical decision support, up from half a dozen in 2017.

Arterys, Quantitative Insights, Butterfly Network, Zebra Medical Vision, EnsoData, and iCAD all received FDA approval for their AI-based solutions in 2017. This is just the start of AI’s future impact in radiology. Pioneer approvals in 2017 — such as Quantitative Insights’ QuantX Advanced breast CADx software and Arterys’s medical imaging platform — will be joined by many more in 2018 as vendors look to leverage the powerful abilities of AI/ML to reduce labor costs and improve outcomes dependent on digital image analysis.

HIT – With about a month left in 2018 the count of FDA approved algorithms year to date is approaching 30 and could potentially hit three dozen by year end. This is a significant ramp up in the regulatory pipeline, but more is needed in the way of clear guidance on how they plan to review continuously learning systems and best practices for leveraging real-world evidence in algorithm training and validation.

Two years ago, we published a report on the promise of open APIs in healthcare. In APIs for a Healthcare App Economy: Paths to Market Success (available as a free download), provider organizations told us that developing and using APIs was low on their list of priorities. Modern REST-style APIs were still not on the radar for most providers and payers.

Back then, HCOs large and small said they expected their EHR vendor to build an API infrastructure for them. Two years ago, only Allscripts and athenahealth offered an app store along with a comprehensive developer support program. At that time, the other EHR vendors were slow-walking FHIR support and had vague plans for app stores and developer support programs. We found that:

Small HCOs were completely dependent on their EHR vendor.

EHR data was the most valuable data resource in healthcare.

Large IT vendors had varied beliefs about the role and contribution of third-party developers.

Large and small IT vendors had strong faith in open APIs.

Small and independent IT vendors were thinking way beyond the EHR.

Physician dissatisfaction with EHRs was an unsolved problem.

Since then, market conditions have continued to change. EHR vendors are now more vocally rolling out the API infrastructures that will bring healthcare into the mainstream of 21st century computing. Every major EHR vendor has delivered a variety of proprietary, HL7, FHIR, and SMART APIs along with the ability to leverage REST to improve their products.

Each of these companies sponsor, or will soon sponsor, an app store for third-party innovation. This has seen a concurrent rise in interest for using APIs within provider organizations. A recent Chilmark report, Healthcare App Stores: 2018 Status and Outlook, examines some of these platforms and the progress that has been made to date in more depth.

That said, some things have not changed. EHR data remains the most valued data resource in healthcare. All but the largest provider organizations are dependent on their EHR vendor for API enabling technologies. Small and independent developers struggle to participate in app stores and EHR developer support programs, despite great ideas for better apps to improve care delivery. And physician frustration with EHRs continues to grow.

Developing and using APIs is a priority for healthcare stakeholders who want to get more from their EHR investments as they identify opportunities for workflow improvements, real-time analytics dashboards, and more. While EHR vendors are leading the charge, our more recent research suggests that many other stakeholders hold or control access to other key data sources that could underpin such efforts.

The opportunity to capitalize on data already collected to provide advice and predictions is too big to ignore, and the easiest way to do this efficiently will be with integrated apps that can pull data from any relevant resource to provide the necessary insights at the right time.

Where do we go from here?

The number of apps in EHR app stores grows monthly. To date, the idea of the potential role and benefits of an independent certification body has not entered the discussion about APIs and app stores since the collapse of Happtique’s efforts in 2013. Currently, EHR vendors certify apps for their customers based on rigorous internal evaluations, but the process varies by vendor. An independent and impartial body could do more than just provide information for prospective users. Instead, it could deliver tremendous value if its assessments were multi-pronged and supplied information about the ongoing use of the app, as well as a consistent way to think about safety, security and dependability. While a certification authority could make it easier for decision-makers, the real value could be in delivering users more information about how the app delivers value across its install base.

Sometime in the next few months, the ONC will issue new rules on information blocking and what constitutes an API that does not require “special effort” to access and use. While these actions may seem like a watershed moment for health IT, the provider market has moved perceptibly since ONC began its rulemaking. Just two years ago, providers were curious about APIs and app stores but they weren’t ready to make any commitments.

Slowly and inexorably, healthcare is embracing the downloadable app as a tool for innovation and improvement. One-size-fits-all platforms are not meeting the needs of the industry and apps can do more to assist with care provision needs than just provide supplemental functionality – to read more about opportunities for apps to have significant impact, take a look at the infographic we developed to accompany our more recent report, or read more in this deep dive post from June.

The opportunity to capitalize on data already collected to provide advice and predictions is too big to ignore, and the easiest way to do this efficiently will be with integrated apps that can pull data from any relevant resource to provide the necessary insights at the right time.

The Da Vinci Project could turn payers and providers from adversaries into partners.

While healthcare frets and obsesses about the state of exchange between providers, payers have been relatively slow to embrace modern ideas about data movement. On the federal level, Blue Button 2.0 lets Medicare beneficiaries download or authorize the download of their own health data. This federal program has generated a lot of interest, signing up roughly 500 organizations and 700 developers at last count. Claims data on 53 million beneficiaries spanning 4.5 years is available for authorized developers and applications. Commercial payers have yet to emulate such an approach. However, there are indications that they are beginning to take notice and act.

Da Vinci Project Addresses Payer-provider Interaction

The Da Vinci Project is a new private sector initiative to address the technical requirements for FHIR-based data exchange among participants in value-based care (VBC) programs. Its general goal is to help payers and providers with techniques and ideas for information exchange that contribute to improved clinical, quality, and cost outcomes. More specifically, it wants to facilitate the creation of use case-specific reference implementations of FHIR-oriented solutions to information exchange challenges in value-based care.

The Da Vinci Project is a relatively new project in from Health Level 7. Its founders represent organizations with experience across a range of VBC business challenges and the FHIR standard. Currently, it has the support of 27 organizations, including 11 payers, 10 health IT vendors (including 3 EHR vendors), and 6 providers.

Making coverage information REST-accessible and granular could vastly improve on the flurry of phone calls, faxes, and EDI-based document exchange that bedevil hospitals and physician offices.

Da Vinci aims to deliver implementation guides (IG) and reference software implementations for data exchange and workflows needed to support providers and payers entering and managing value-based contracts and relationships. FHIR implementation guides are roughly analogous to an IHE profile in that they define actors and actions in a defined use case. In this instance, the idea is to help providers and payers operationalize their complementary processes in value-based contracts.

Initial Use Cases

Da Vinci at one time contemplated creating nine use cases. It eventually narrowed this focus to developing IGs for two that have particular VBC relevance:

30-Day Medication Reconciliation

Medication reconciliation is a time-consuming part of patient encounters anywhere on the care continuum. Post-discharge, this capability can reduce the incidence of adverse drug events and head off re-hospitalizations. The objective of this project is to create a simple workflow that allows providers to attest that a medication reconciliation is complete.

Coverage Requirements Discovery

Coverage requirements discovery enables a provider to request payer coverage requirements in their clinical workflow. In-workflow coverage details can make point-of-care decision making about orders, treatment, procedure, or referrals more efficient. The ability to make both clinical and administrative decision mid-encounter and with a patient minimizes the non-clinical cognitive burden on providers. By reducing denials and delays administrators can be freed for other patient-specific work. As prior authorization becomes more common in value-based payment programs, providers could save time if such information were more readily available to them.

Both IGs will be balloted in HL7’s September Ballot Cycle, and Da Vinci is actively encouraging people to comment. Da Vinci team members will be on hand to help implementers interested in these two initial use cases at HL7’s September Connectathon in Baltimore, MD. It has also begun working on requirements for a third use case, Documentation Templates and Payer Rules.

Blue Button Still Leads

While the data scope of this effort is not nearly as broad as Blue Button’s, which provides access to a patient’s claims history, it is a reasonable first step. Making coverage information REST-accessible and granular could underpin applications, vastly improving the flurry of phone calls, faxes, and EDI-based document exchange that bedevil hospitals and physician offices. Hopefully, this effort is a leading indicator of better access to commercial payer data to come for patients and providers.

HIMSS18 Review 3 of 4

A decade of attending the annual HIMSS conference and I leave both excited and depressed. Excited and enthused by meeting so many people who are dedicating their lives to affect positive change by improving healthcare delivery through IT. Depressed as yet again I find a lack of real leadership and vision among many who repeat the years’ worn phrases of interoperability, patient-centered care, reducing physician burden, and the like.

“Oh please, can’t we just get on with it,” I scream to myself.

In keeping with the bipolar theme that is HIMSS, following are my takeaways, in an up-down fashion.

Up: Anthem goes public on its deal with Epic r/e HealthyPlanet. This partnership is an exciting step in enabling provider-payer convergence wherein Anthem will embed IP (risk, prior authorization, claims adjudication, etc.) into HealthyPlanet and take HealthyPlanet to market with wrap-around services.

Down: Head-in-the-sand vendors who are entrenched in FFS model. These vendors told me point blank that the market will revert back to FFS, that value based care is DOA. Gotta wonder what they’re smoking.

Up: Telehealth going mainstream. Saw loads of examples/demos of telehealth with direct or near-direct integration to the EHR. Been hearing about the coming of telehealth since I started this company in 2007. I believe we are finally there.

Down: Almost zero discussions on managing the costs of care/cost containment. There was some discussion on reducing clinical variability – but beyond that, HIMSS was devoid of any deep conversations on this critical variable in the value equation.

Up: Clear demonstrable, scalable use cases for AI. I was particularly impressed with the work 3M has done with Verily, leveraging Deep Mind technology for specific measures. Though just released, 3M has already landed 17 provider clients and 2 payers.

Down: The preponderance of AI vendors with little sense of scaling their solution. Many of the AI vendors I talked to have ongoing projects with “Big Brand” healthcare systems. That’s great – but disturbingly, few have taken the next step to address how they plan to scale their solution within an organization for widespread adoption and use.

Up: New solutions leveraging FHIR to insert actionable insights directly into clinical workflows. This is near nirvana for me, as it gets beyond the Herculean task of interoperability writ-large and tackles those points where significant friction and opportunity exists.

Down: One policy pundit after another talks yet again about the need for interoperability. Frankly, this is no longer a technical issue. Interoperability is a policy issue and really does not belong at an event such as HIMSS – where we should be talking about the future, not rehashing the past ad nauseum.

Clearly, a lot of work lays ahead for us in the health IT arena, which provides us all meaningful work going forward. And frankly, we are in but the top of the third inning – there is so much to do, it really is an amazing time to be in the healthcare IT market.

Thankfully, we are at last moving beyond the prescriptive use of IT via meaningful use, transitioning to meaningful insights from the data we are collecting and placing into clinical workflows. There is a near unfathomable opportunity to begin leveraging clinical, genomic, and other data sets that will lead us to dramatic improvements in care delivery – improvements that are likely beyond our comprehension at this time.

Despite some of my downer moments at HIMSS18, I could not be more excited for what the future holds for us as an industry – and, personally, in how even I and my care team will leverage new insights to more effectively and efficiently manage my own condition.

HIMSS18 Review 1 of 4

By Ken Kleinberg, Brian Murphy, and Brian Edwards

What’s inside the black box of algorithims?

During Eric Schmidt’s opening keynote at HIMSS18, he asserted that, given the state of algorithms today, it’s possible to take any large data set and make strong predictions – and healthcare is no exception. There’s no need for clinical content knowledge, rules, or past experience. His statements were met with plenty of skepticism – less about the capabilities of Alphabet and its algorithms, and more about the realities of gaining access to the right healthcare data sets. This is not trivial.

So who should get data from who? What about patient consent? Who can be trusted? Historically, health systems have done their own analytics and research within the boundaries of their own systems. Vendor analytic solutions were implemented on site. Even this limited scenario presented complex challenges – in particular, just bringing data together to a point where it could be analyzed. Transferability of models was difficult, and costs were not shared. The use of analytics was therefore sparse, mostly limited to research and quality improvement.

Bulk data access will be critical for the industry to move beyond the current artisanal methods of building and maintaining data stores for analytics purposes.

Slowly but surely, the situation is changing. The cloud is becoming much more accepted, with many options possible (private, public, hybrid). Algorithms, enabled by rapidly advancing hardware/computing power, are capable of dealing with much larger and more complex data sets. Data operating system approaches can stream data in a liquid fashion from multiple locations/sources, reducing the need for centralized repositories.

A next step as data becomes more available is to fully utilize it. Advances in natural language processing (NLP) are able to extract/mine useful features from unstructured data such as text, faxes, and reports. Algorithms can increasingly use incomplete, messy, or ill-defined data and “fill in the blanks.” At a certain scale, data quality becomes less of a factor in conducting analytics.

Despite the black-box nature of AI systems, they can still be validated using objective methods, such as how and what they were trained upon, and how they perform in real-world clinical scenarios vs. human performance.

Whose Black Box?

There is also a lot of healthy discussion about how AI systems make decisions. The primary concerns are black-box algorithms and a lack of data transparency. This even reached a point where a major educational institution recently recommended that governments not rely on any AI or algorithmic systems for “high stakes” domains, such as healthcare technology, where the way a system makes a decision cannot be understood in terms of due process, auditing, testing, and accountability standards.

Despite the black-box nature of these AI systems, the fact is that they can still be validated using objective methods, such as how and what they were trained upon, and how they perform in real-world clinical scenarios vs. human performance. As long as they are not used in closed- loop systems, and as long as there is a human expert able to accept or dismiss their recommendations, they provide valuable input (before or after) for difficult cases (such as whether surgery or therapy is the best course of action). They may also serve as a last resort with the proper consent (as with a terminal cancer patient).

So that all is highly promising – but is healthcare ready to hand this data over?

Flat FHIR and Analytics

Percolating below the surface at HIMSS was disquiet about the “bulk data transfer” proposal. This proposed method would make large sets of data (think cohort-level data) more freely available for analytics purposes. It will allow a user or program in one organization to issue a broadcast query to the country at large and receive patient data from other organizations. For example, an ACO quality manager could issue a query to a community and get all of the relevant data for patients in the ACO.

This proposal, also known by the name “Flat FHIR,” is part of the TEFCA discussion (Trusted Exchange Framework and Common Agreement) insofar as such queries are a contemplated use case. But among people who are paying attention to this proposal, there are unanswered questions.

Open-ended queries arriving from anywhere in the healthcare system are not currently part of most HCO’s IT capacity plan:

Will organizations end up having to add more compute and network resources to satisfy such queries?

Does TEFCA’s requirement to provide non-discriminatory access mean that organizations will not be able to implement reasonable network traffic and quality-of-service controls?

If patients have different consent profiles in different organizations, how should a query recipient satisfy the request?

Will organizations have to establish revenue share agreements based on pro-rata data contributions?

Will the fact that TEFCA puts the onus on the query receiver to reconcile medications, allergies, and problem lists mean that the receiver must verify that its data is current with proximate organizations before satisfying the original query?

Such questions represent the tip of the iceberg. As a practical matter, before the bulk data transfer proposal can ever be a day-to- day reality, many technical, non-technical, and financial questions must be resolved.

Despite these questions, bulk data access will be critical for the industry to move beyond the current artisanal methods of building and maintaining data stores for analytics purposes. After all, analytics has more to offer than the dashboards and reports that describe the recent past. HIMSS18 was less a venue to air out the challenges associated with making bulk data transfer a reality than it was an opportunity to preview some of the advanced and predictive analytics use cases it could enable.

Our favorite post of the year is this one. As analysts, we come together with our propeller hats on to collectively look ahead at the key trends in the year to come in the healthcare sector. While there are any number of predictions one might make for this dynamic market, we will stick to what we know best: Healthcare IT and the broader issues that influence this sector.

Following is our annual Baker’s Dozen. As always, love getting your feedback in the comment section. Let the dialog begin.

Merger & acquisition activity continues; Humana or Cigna acquired.Major mergers and acquisitions that mark the end of 2017 (CVS-Aetna, Dignity Health-CHI and rumored Ascension-Providence) will spill over into 2018. Both Humana and Cigna will be in play, and one of them will be acquired or merged in 2018.

Retail health clinics grow rapidly, accounting for 5 percent of primary care encounters.Hot on the health heels of CVS’ acquisition of Aetna, growth in retail health reignites, albeit off a low overall footprint. By end of 2018, retail health clinic locations will exceed 3,000 and account for ~5% of all primary care encounters; up from 1,800 and ~2%, respectively, in 2015.

Apple buys a telehealth vendor.In a bid to one-up Samsung’s partnership with American Well, and in a bid to establish itself as the first tech giant to disrupt healthcare delivery, Apple will acquire a DTC telehealth vendor in 2018.

Sixty percent of ACOs struggle to break even.Despite investments in population health management (PHM) solutions, payers still struggle with legacy back-end systems that hinder timely delivery of actionable claims data to provider organizations. The best intentions for value-based care will flounder, and 60% of ACOs will struggle to break even. ACO formation will continue to grow, albeit more slowly, to mid-single digits in 2018 to just under 1,100 nationwide (up from 923 as of March 2017).

Every major EHR vendor delivers some level of FHIR support, but write access has to wait until 2019.While some of the major EHR vendors have announced support for write access sometime this year and will definitely deliver this support to their most sophisticated customers, broad-based use of write APIs will happen after 2018. HCOs will be wary about willy-nilly changes to the patient record until they see how the pioneers fare.

Cloud deployment chips away at on-premises and vendor-hosted analytics.True cloud-based deployments from name brand vendors such as AWS and Azure are in the minority today. But their price-performance advantages are undeniable to HIT vendors. Cerner will begin to incent its HealtheIntent customers to cloud host on AWS. Even Epic will dip its toes in the public cloud sometime in 2018, probably with some combination of Healthy Planet, Caboodle, and/or Kit.

True condition management remains outside providers’ orbit.Providers will continue to lag behind payers and self-insured employers in adopting condition management solutions. There are two key reasons why: In particular, CMS reluctance to reimburse virtual Diabetes Prevention Programs, and in general, the less than 5% uptake for the CMS chronic care management billing code. In doing so, providers risk further isolation from value-based efforts to improve outcomes while controlling costs.

Mobile-first becomes dominant platform for over 75% of care management solutions.Mobile accessibility is critical for dynamic care management, especially across the ambulatory sector. More than 75% of provider-focused care management vendors will have an integrated, proprietary mobile application for patients and caregivers by end of 2018. These mobile-enabled solutions will also facilitate collection of patient-reported outcome measures, with 50% of solutions offering this capability in 2018.

Solutions continue to document SDoH but don’t yet account for them.A wide range of engagement, PHM, EHR, and care management solutions will make progress on documenting social determinants of health, but no more than 15% of solutions in 2018 will be able to automatically alter care plan interventions based on SDoH in 2018.

ONC defines enforcement rules for “data blocking,” but potential fines do little to change business dynamics that inhibit data liquidity.The hard iron core of this issue is uncertainty about its real impact. No one know what percentage of patients or encounters are impacted when available data is rendered unavailable – intentionally or unintentionally. Data blocking definitely happen,s but most HCOs will rightly wonder about feds willingness to go after the blockers. The Office of the National Coordinator might actually make some rules, but there will be zero enforcement in 2018.

PHM solution market see modest growth of 5-7%.Providers will pull back on aggressive plans to broadly adopt and deploy PHM solution suites, leading to lackluster growth in the PHM market of 5%to 7% in 2018. Instead, the focus will be on more narrow, specific, business-driven use cases, such as standing up an ACO. In response, provider-centric vendors will pivot to the payer market, which has a ready appetite for PHM solutions, especially those with robust clinical data management capabilities.

In-workflow care gap reminders replace reports and dashboards as the primary way to help clinicians meet quality and utilization goals.This is a case where the threat of alert fatigue is preferable to the reality of report fatigue. Gaps are important, and most clinicians want to address them, but not at the cost of voluminous dashboards or reports. A single care gap that is obvious to the clinician opening a chart is worth a thousand reports or dashboards. By the end of 2018, reports and dashboards will no longer be delivered to front-line clinicians except upon request.

At least two dozen companies gain FDA-approval of products using Machine Learning in clinical decision support, up from half a dozen in 2017.Arterys, Quantitative Insights, Butterfly Network, Zebra Medical Vision, EnsoData, and iCAD all received FDA approval for their AI-based solutions in 2017. This is just the start of AI’s future impact in radiology. Pioneer approvals in 2017 — such as Quantitative Insights’ QuantX Advanced breast CADx software and Arterys’s medical imaging platform — will be joined by many more in 2018 as vendors look to leverage the powerful abilities of AI/ML to reduce labor costs and improve outcomes dependent on digital image analysis.

Two weeks ago, we attended the 2017 Cerner Collaboration Forum, which combined the Population Health Summit with three other annual events (Ambulatory Summit, CareAware Summit, and Cerner Physician Community). This larger single summit resulted in a broader representation of provider organizations and other attendee. The “power” of combining these various events also reflects the growing convergence of technologies, workflows, and practices that are necessary as providers, payers, and other stakeholders further shift to valued-based care.

Here are four key impressions of the event.

PHM presentations have matured. The client population health management (PHM) presentations employed a case study approach and included results from deploying various HealtheIntent solutions. This was a change from the past two years, which focused more on implementation issues and presented limited utilization and outcomes data. Early adopters of HealtheIntent now have two or three years of experience using some of the solutions (HealtheRegistries, HealtheCare) and have started to really focus on operational and tactical-related issues, ranging from integration with transition management processes to population health maintenance to care team workflows.

Starting a provider-owned health plan is not for the meek. Bill Copeland from Deloitte Consulting spoke about research on 224 provider-owned plans with more than $1 billion in annual revenues. Deloitte has identified four success factors for these types of plans.

• Core line of business. It is a significant percentage of their overall payer mix and the HCO has lengthy experience in treating those patients prior to enrolling them in a provider-owned health plan.
• Tenure. The 10 most profitable plans were all more than years old.
• Scale. Plans need more than 100,000 members in order to have an adequate risk pool.
• Market Share. In their market, they rank at least second or third in market share, with the ability to buy services out of network at reasonable costs.

What really caught my attention was that it took a minimum of five years for a new provider-owned health plan to become profitable, with significant losses realized in the first two or three years. This should them significant pause to health systems with constrained cash flows.

Provider demand for APIs is strong, but they have questions. A half-day event focused on FHIR and APIs preceded the summit. Provider interest is strong – Cerner has more than 1,100 applications in its sandbox, and this number is increasing rapidly – but a few key questions remain.

• Security or convenience? Which of these two attribute will patients demand more of, and what tradeoffs are they willing to make in the process?
• Vendor role? Providers and potentially patients need more guidance and intelligence on the information brought in via APIs especially in regards to the variety and veracity of the data. Using this data to provide analytic insights is still a bit down the road.
• Increasing utility? Providers ultimately want API-supplied information put into their flow charts/templates within their EMR and where else appropriate, with little manual intervention.
• Who regulates? There’s a large degree of ambiguity at the federal level as to which agency or agencies (FDA, FTC, HHS, etc.) will regulate privacy, security and competition-related issues. This has caused some hesitation among providers and vendors.

Health IT is an enabler, but more is needed for community-level change. A panel on Healthy Nevada, a five-year partnership between Cerner and the city of Nevada, Mo., discussed the lessons learned and impact of the partnership.

Since 2012, Vernon County has moved from 88 to 60 in Missouri’s county health rankings (as updated annually by the Robert Wood Johnson Foundation). HealtheIntent gives the community a single source of community-wide data and access to real-time public health information, which is used to segment the population and begin to employ ‘hot-spotting’ interventions.

What struck me during the panel and in a few conversations I had afterward, though, was that, despite the desire to connect healthy lifestyles, creating a public health or health system-led program simply will not work without broader engagement with various civic organizations, especially in rural areas or among certain population segments. Cerner and a number of other vendors are starting to place a greater emphasis on consumer and caregiver engagement functionality – but as our recent Care Management Market Trends Report suggests, there is much progress to be made.

Will small providers be left behind? This year’s Cerner Collaboration Forum marked the beginning of a maturation of provider attendees who have been on the HealtheIntent platform (HealtheRecord, HealtheRegistries, HealtheCare) for a few years now. Early adopters are moving away from implementation-related issues and starting to fine-tune how these solutions support specific care management and care coordination use cases and workflows.

Combining all the events in a single one also provided a broader scope of attendees. We received feedback from a wider array of providers, including smaller customers who still have not made a substantial PHM investment or others who were reevaluating earlier investments in point solutions and looking for a more comprehensive “go forward” data strategy and IT investment.

The question is whether most small to midsize providers are willing and able to make the necessary PHM investments including in Health IT moving ahead forward. The Cerner event did not really cover this topic and there are mixed signals in the market place right now about this market segment right now including when PHM buying activity may begin to pick up in earnest.